Solution to crisis gets cost estimate
$11.8 billion to solve local homelessness, study says
With the pandemic ending and governments signaling they might devote more money toward homelessness, a leading research organization is boldly putting a dollar amount on what it thinks it would take to whisk every unhoused person in the Bay Area off the streets: $11.8 billion.
The Bay Area Council came to its estimate in a report released Thursday by calculating it would take $9.3 billion to create enough shelter and housing to put roofs over all 35,118 people now estimated to be homeless in the region’s nine counties — then $2.5 billion a year to maintain those roofs with services and staffing.
It’s the first comprehensively researched figure of its kind for the Bay Area, and the people who wrote it at the businessoriented council maintain it’s not just pie in the sky. The California Legislature is considering spending $20 billion on homeless programs statewide in the next budget, Gov. Gavin Newsom is proposing $12 billion, and San Francisco Mayor London Breed this week proposed adding more than $1 billion in new funding over the next two years.
“The Bay Area’s unsheltered homeless prob
lem is the worst in the United States — there’s no way to spin it — and we’ve been in denial of the severity of this problem for decades,” said Adrian Covert, one of the authors of the 54page “Bay Area Homelessness: New Urgency, New Solutions.”
“The bill’s come due,” he said. “And I think people are hungry to see solutions.”
The most visible manifestation of homelessness is the number of people who are utterly without shelter, and in the Bay Area that is 73% of the total unhoused population. Nationally, it’s about onethird. The Bay Area’s unsheltered figure was 67% in 2019, when the region’s homeless population was pegged at roughly 28,000.
Covert said creating enough emergency shelter — primarily by erecting outdoor “cabins” used by Oakland, the cheapest alternative — to accommodate everyone would consume only about $245 million of the proposed budget. Those units would then cost about $481 million a year to maintain.
Cabins cost about $11,000 apiece to erect, compared to the $43,000 it usually costs per bed to create a typical group shelter, according to the report.
The rest of the $9.3 billion in upfront housing costs would use a mix of modular prefabricated units and rehabbed hotel and other existing buildings rather than constructing everything from scratch — and some homeless prevention funding is in there as well. In San Francisco, a traditionally built housing unit costs more than $700,000, but hotel conversions like the ones in the past year’s statewide Homekey program cost around $200,000 a unit — and only$174,000 regionwide.
“It’s not enough just to get people off the streets with shelters,” said Covert, the Bay Area Council’s senior vice president of public policy. “If you don’t have a place for them to exit, the problem will just expand.
“This is a public health emergency. It needs that kind of attention. And I think everyone’s ready to give it that.”
A poll issued last month by the council found that homelessness beat out the coronavirus and wildfires as the No. 1 concern listed by Bay Area residents.
Thursday’s report follows up a similar study released in 2019 by the council, and Covert’s observation about needing exits from shelter is nothing new. Also, the homeless total of 35,118 comes from 2020 federal figures based on onenight counts taken in individual communities, and those counts are long acknowledged to be well short of complete.
In San Francisco alone, the last official tally of about 8,000 homeless people taken in 2019 is said by advocates to be shy by about 9,000 today, given the onenight nature of the method and a common estimate that homelessness grew as much as 30% during the pandemic.
What is new about the Bay Area Council study is an actual figure — $11.8 billion — for regional leaders to shoot for and to debate.
It doesn’t delve deeply into how to handle fuzzy unknowns such as future expansions of homelessness, or the prospects of potential legislation making it easier or harder to build shelters and affordable housing. Or the full effect of federal poverty funding that could help people stay in their homes. Any of those factors could exponentially affect local efforts.
But it’s meant to articulate a goal. And be a conversation starter for decisionmakers.
“One thing that’s great is for people to have an honest conversation about what homelessness would really cost to end,” said Margot Kushel, director of the UCSF Benioff Homelessness and Housing Initiative, who advised on the report. “Maybe that way we won’t just constantly criticize efforts being made, which have never been scaled to really address the problem which has existed for 40 years.”
Kushel dates the beginning of modern homelessness to Ronald Reagan’s decimation of poverty programs in his first years as president. “This cannot be solved by local government alone,” she said. “It has to be a regionwide effort, and state and national effort.”
The report suggests raising the $11.8 billion largely through a combination of state money, federal funding and regional bonds.
The emphasis on building new shelters would be a shift in focus over the past decade, when the Bay Area’s number of shelter beds actually declined by about 1% to 11,000. In that same decade, the number of permanent housing units created for homeless people rose 91% to about 27,000, according to the report. That housing could never keep up with the need, the report says, because of the high rental and construction costs in the area.
Tomiquia Moss, CEO of the nonprofit All Home, which advocates a regional approach to homelessness, said it’s important to make sure a significant part of any housing created by the $9.3 billion is transitional — that is, housing to stay in before you move to a permanent home.
Too many people resist traditional mass shelters, said Moss, who also advised on the council report. Letting people stay in a tiny home or inexpensive apartment that can be passed on once you move into a permanent residence is cost effective and practical, she said.
“This whole dichotomy of permanent housing being the only solution is not working,” she said. “We hear from a lot of people that traditional shelter doesn’t work for them. We need alternatives.”